China’s non-interference could hurt China, analysts say

A political risk analyst, says the ‘laissez-faire’ approach of China towards the military coup of Myanmar, could harm the Asian giant’s strategic and economic interests in the Southeast Asian country.

In contrast to the strong condemnation and sanctions by Western powers – including the US and the European Union – China’s response to the February 1 coup and the violence that followed was more subdued. Beijing was cautious and stressed the importance of stability.

“But while China is happy to deal with those in power in Naypyidaw, it is clear that the event that sparked the coup could threaten its interests,” said Gareth Price, senior research fellow at the Asia-Pacific Program of the British think tank Chatham. House, said in a March note.

Naypyidaw is the capital of Myanmar and one of the hotspots for anti-coup protests. Security forces used increasingly violent tactics to quell the protests, killing more than 550 civilians, Reuters reported.

Protesters, furious at Beijing’s apparent lack of concern for those killed during protests, attacked Chinese factories in Myanmar last month, the Associated Press reported. In response, Beijing called on Myanmar to “ensure the security of life and property of Chinese companies and staff there”.

“China’s frustration with the risks facing its economic interests suggests that the coup has become a key test of the already complex relationship between Myanmar and China,” said Kaho Yu, senior analyst at Verisk’s risk consultant Maplecroft, said in a March report.

China is a major investor in Myanmar, a country in Southeast Asia that has one of its borders. Myanmar is also an important part of President Xi Jinping’s signature Belt and Road Initiative.

“In general, Beijing expects investments in Myanmar to contribute to its energy security, trade and stability in its environment,” Yu said.

“China maintains that an economic slowdown in its environment will lead to social instability and security threats, which in turn will threaten the political stability of Chinese border provinces like Yunnan,” the analyst added.

The latest available data from the Myanmar Investment and Corporate Administration Directorate showed that the approved foreign investment from China was approximately $ 139.4 million from October 2020 to January this year. Myanmar’s financial year begins in October.

The approved Chinese investments were only exceeded by Singapore, which totaled $ 378.3 million in the same period the data showed.

In terms of trade, China is the main destination for exporting Myanmar and the largest source of imports in the Southeast Asian country.

But the importance of Myanmar to China extends beyond the economy, Price of Chatham House said.

“The oil and gas pipelines that run through Myanmar diversify China’s supply resources and help avoid the use of Malacca Strait, a hotspot for piracy,” he said. “And the development of ports and land connections between China and Myanmar is also helping to bring about a greater Chinese presence in the Indian Ocean.”

Beijing has cultivated cordial ties with the military in Myanmar as well as the civilian government of de facto leader Aung San Suu Kyi in the past, Yu pointed out. In recent years, international pressure on Myanmar due to the Rohingya crisis has pushed the country closer to China, he added.

Chinese top councilor Wang Yi, China, reportedly said last month that “no matter how the situation in Myanmar changes, China’s determination to advance China-Myanmar relations will not falter.”

But any feeling from China that it would remain Myanmar’s main partner, regardless of who is in charge, could be a ‘wrong assessment’, Price said.

“If the military is forced to return, it could lead to a more pronounced tilt against China that threatens China’s strategic interests,” he said.

Instead, Beijing could help end the coup – a move that could threaten its interests in Myanmar in the short term, but is likely to advance in the longer term, Price said. Myanmar’s generals do not intend to relinquish power, but will struggle to hold on to it without China’s support, he said.

“As its global role expands, China should learn to distinguish between different types of authoritarian government and judge its response accordingly,” Price said.

“China needs to be aware that a one-size-fits-all policy for all who do not interfere will not win many friends, and that it is probably also of a less wholesome nature.”